Key Takeaways:
- A federal judge ruled that Shaquille O’Neal remains a defendant in a class action lawsuit over his promotion of the Astrals NFT project
- Case allegedly involved the sale of unregistered securities.
Shaquille O’Neal, the basketball legend and Hall of Famer, is no stranger to the spotlight, but his recent involvement in the world of cryptocurrency has landed him in hot water.
A federal district judge recently ruled that O’Neal must remain a defendant in a class action securities lawsuit connected to Astrals, a non-fungible token (NFT) venture he founded.
This case marks yet another instance where a high-profile celebrity is entangled in legal disputes over their promotion of cryptocurrency projects.
The lawsuit, which was filed last year, centers around O’Neal’s role in the promotion and subsequent collapse of the Solana-based Astrals project. Astrals featured 10,000 “metaverse-ready avatars” tied to a decentralized autonomous organization (DAO) and a governance token called GLXY.
Plaintiffs in the case, represented by The Moskowitz Law Firm, allege that the value of Astrals tokens plummeted after O’Neal “fled the project” following the collapse of FTX in 2022.
A message from O’Neal in a Discord chat, where he emphatically stated, “I’M NOT FUCKING LEAVING,” is being used as evidence of his failed promises and pivotal role in the project.
While the U.S. District Court for the Southern District of Florida, Miami Division, dismissed the claim that O’Neal was a “control person,” it found that he could still be held liable as a “seller” because he successfully solicited the purchase of the products.
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The court did not dismiss the allegation that Astrals sold unregistered securities, which could have far-reaching implications for other celebrities involved in similar crypto promotions.
This case against O’Neal is part of a broader trend of celebrities facing legal scrutiny over their involvement in cryptocurrency ventures.
Celebrities like Kim Kardashian and Tom Brady have also been sued for promoting various crypto projects on social media. In Kardashian’s case, the SEC fined her for failing to disclose the full nature, source, and amount of compensation she received for promoting EMAX tokens on Instagram, despite including a #AD disclosure.
The legal challenges faced by O’Neal, Kardashian, and others highlight the increasing regulatory scrutiny on the intersection of celebrity endorsements and cryptocurrency. As the crypto market continues to evolve, so too does the need for clear guidelines and regulations to protect consumers from potentially misleading promotions.
For O’Neal, the road ahead remains uncertain as the lawsuit moves forward. The outcome of this case could set a precedent for how future crypto-related class action lawsuits are handled, particularly those involving celebrity endorsements. As Adam Moskowitz, the attorney representing the investors, noted, this ruling could bring much-needed clarity to the murky waters of crypto litigation.
